The Japanese are very much dependent on oil. The yen came under tremendous pressure because of increased oil prices but since then the Japanese have been able to manage their economy so as to put that matter right.
The next matter is the whole area of the level of excise duty on oil products. There was no change in absolute value terms between 1973 and 1978. The paper proposes that by reducing dependence on imported oil there will be a weaker link between economic growth and energy consumption, a greater saving of energy and more systematic developments in domestic production. We covered the question of the diversification of energy supplies. All of this has been mentioned before but more emphasis is being placed on it now.
Covered also is the question of price and of tax policy. There is a summary of what the Community are trying to do in this regard. Basically, there is a big problem in regard to bringing about harmonisation.
Paragraph 12 summarises the extent of these differences and concludes that the divergences in energy prices and taxation is increasingly becoming an obstacle to the harmonisation of energy policies and states that complete harmonisation is a Community long-term objective. The first step would be a common approach to pricing, tariff structures and frameworks.
The Community have prepared a separate document in which are discussed various means of raising Community revenue from energy. Such revenue could be used to further the energy policy. There is reference to a tax on the consumption of energy, to a tax on the production of energy in general and to oil in particular and to a duty or levy on imports. There has not been much progress in this regard either.
The next question was the amount of money being spent on energy investment. That is covered in paragraph 15. In the period 1980 to 1990, the Member States plan to spend 400 billion ECU's of capital investment in energy. It is assumed that the greater part of this investment will be in terms of the construction of electricity generating stations, mainly coal and nuclear. The particular role of the Investment Fund will be to help remove the obstacles which now prevent investments from being made.
The next document is Communication (80) 583. At a recent meeting there was agreement on the crucial need to construct an energy policy, to discourage waste and to encourage diversification but no specific measures were agreed.
Then, there are two proposals containing draft Regulations which would ensure continuity of funding already begun for projects in energy saving and for projects to exploit alternative energy sources.
The Committee will realise that there are many communications and documents being published in this area but that very few practical steps are being taken. This is a source of concern for the Committee. As indicated in paragraph 18, we accept the view that Ireland must reduce its present overdependence on one non-indigenous source of energy, namely, oil. There was some talk about having a small number of regional power stations and there was the suggestion that such a policy would be best for Ireland. However, we have been advised that this would not be a good idea in terms of efficiency.
We noted that there was a ceiling for aid for support projects for the purpose of exploiting alternative sources of energy. We noted, for instance, that there was much emphasis on nuclear expenditure and on the greater use of coal. We then came up against the fact that there was no investment by the EEC in the development of certain renewable sources of energy, especially in the case of wave energy, while we recognise that there was some investment in harnessing wind and biomass. From our discussions with the people who visited us, we were given the impression that there are a lot of difficulties with wind power, particularly with the high velocities of wind one would get here. But there is some work going on in that area by the ESB. We gave some attention to the wave energy aspect of this in paragraph 19.
It struck us, and me particularly, because as Chairman of the Sub-Committee I visited Brussels and spoke to the directors of the various R and D divisions there, that the EEC have decided as a policy not to spend even one penny on the development of wave energy. Given that Ireland, in the latitude 40th to 60th is well placed to avail of this source, we thought this was strange. We consulted papers published by the ESB expert who pointed out that a certain length of Irish coastline, 250 kilometres, could give energy equivalent to the total of our present generating capacity. We got a communication from Mr. Lewis of the Civil Engineering Department of UCC, Oceanography Section, where they are doing some limited research although they have very little funds. He provided us with information which we put in the Appendix which shows how relatively important for Ireland this research is. We got the impression that there are people who are only waiting for monetary support to do work in this area. The Sub-Committee felt that if something does not happen quickly it will never happen, so we should take the first step even if it takes ten or 15 years. It is our view that a Community research programme into wave energy potential should be launched forthwith. That has not happened and no recommendations have come from the EEC.
From our point of view, and from a general EEC point of view, this is understandable, because obviously Ireland and Scotland will stand to gain most from this. Clearly, countries like Belgium and Luxembourg will not get much from wave energy, and Belgium for instance would not like their coast line cluttered up with wave energy generating equipment. That would not apply to us and it could make a significant impact on our energy requirements. Also it is a renewable source of energy.
We have been doing well from biomass and this has been summarised in paragraph 20. The cost of the projects has grown rapidly, but nevertheless it is something that is to be recommended and we would like to see it continued. We invited a group called The Friends of the Earth to visit us, and they have been doing some interesting work, reviewing energy policy in a global sense. We felt that they had a lot to offer and we listened to them. We feel that the renewable sources of energy should be given a lot more attention by the EEC and obviously we put more emphasis on wave energy.
We noted in paragraph 22 that the Council of Ministers resolution gradually reduced below 0.7 this ratio of energy consumption growth to economic growth. It was interesting to find out from the Confederation of Irish Industry that in our case we have been bettering that in recent years. We thought that it would be interesting to put these figures in the report. We take the growth in the figures of oil equivalent between 1973 and 1978 and compare it with the growth in our GNP, and we have been doing well.
We say in paragraph 24 that the harmonisation of energy prices and practices is a good objective but we see a lot of difficulties. It would be inappropriate to attempt to harmonise tax and prices on particular commodities on an ad hoc basis without a detailed examination of the repercussions on other revenue expenditure.
Paragraph 25 moves towards our conclusion. We understand the Community are as yet a long way from formulating an overall energy policy. This is a matter of concern. Most of the documents considered are merely discussion documents. Since 1973 very little progress has been made. Given that a lot of the economic issues that we have to live with and are paying for at the moment are derived from energy diffucilties it is extraordinary that the EEC is not making more progress in this area. We feel that we should draw attention to certain areas, even if after due research and evaluation they proved to be no more than useful adjuncts. We have put particular emphasis on wave energy and we are pleased to see that biomass is already being followed up.
We also mention here that coal will play an increasing role in the energy picture and it is getting a lot of attention in the EEC because countries like Belgium and others have reserves of coal which now have become economic to develop. It is clear that in our case every effort should be made to improve existing and to develop new facilities in this regard, and to exploit indigenous sources of coal and peat. We know this is happening in relation to peat and more recently there has been more interest in old coal mines which maybe ten years ago might have been thought to be uneconomic. We again make the point, probably very much under the influence of what we read and our contact with people like The Friends of the Earth, that all the renewable sources of energy should get attention, and the one with the greatest potential for us is wave energy which is not getting one penny of investment or support at the moment from the EEC.
